Buying on a Land Contract: When is the Home Mine?

Typically, a land contract will determine the length of time you’re required to make payments on a home before you own it. As in this reader’s case, factors like the death of the seller can complicate the process.

Q: I got a house on a land contract in 2005 and the seller died and I’ve been paying taxes for 15 years and still live in the house. When will I get the house in my name? The real estate taxes come in my name.

A: The land contract you signed contains the information you are looking for. Your contract would provide the length of time you were required to make payments on the home. You can sort of think of the land contract as an installment contract where you are paying off the home over time. It’s also like a promissory note you might have signed if you purchased the home and used a lender.

Basically, the installment contract says that if you make the required payments on your home, the seller is then obligated to give you the title to the home. We don’t know what terms you have on your installment contract. Your deal with the seller might have been to pay the seller over 5, 10, 15 or even 30 years. We also don’t know if you’ve made all of your payments. If you have satisfied the terms of the installment contract, they you’d have the right to ask the seller to convey title to you.

Your installment contract would also have required you to pay real estate taxes on the home along with carrying insurance on it. Your contract would have also required you to make repairs to the home and essentially treat the home as yours. The one thing missing from your arrangement is having the legal ownership of the home. You would have had a quasi-form of ownership through the contract — equitable ownership but not legal ownership.

Once the title is conveyed to you, you would no longer be an installment contract buyer but, rather, you would become the full legal owner of the home.

The wrench here is that the seller is dead and in your email you wrote that he died some time ago. Your seller’s death could pose a problem for you. You need the seller or his heirs to convey legal title to you.

You should talk with the family members that inherited your seller’s property and work with them to get legal title to the property. They will need to sign a deed conveying title to you and give you a document to indicate that you have paid your debt in full.

We’d suggest you obtain title insurance on the purchase of your home to make sure that everything was done right and you have a title company backing up the ownership to your home. And, please consult with a real estate attorney who can make sure that you receive the title you agreed to under the land contract.